NU Online News Service, July 14, 3:05 p.m. EDT

WASHINGTON–The Self-Insurance Institute of America is asking a House committee to remove provisions in proposed health care reform legislation the industry fears is an effort to limit the growth of self-insurance health plans.

The letter to the House Education and Labor Committee was written as the panel works to complete its portion of H.R. 3200, the America's Affordable Health Choices Act of 2009.

One provision at issue proposes a tax on self-insured health plans, called a "fair share fee." It will be used to fund the Comparative Effectiveness Research Trust Fund (CERTF) being established by the proposed law.

Cliff Roberti, director of government relations for the SIIA, said the provision calls for a $2 per member tax on each self-retention group. The CERTF is being established as a means of helping reduce growth in health care costs.

SIIA's concerns are that this "opens the door" to taxation of nonprofit groups and gives the Department of Health and Human Services the authority to increase the levy in future years–with no limitation, Mr. Roberti said.

SIIA argues in a letter to the committee leadership that the tax would punish those employers that are "doing the right thing" by providing their employees health care coverage.

The other controversial provision SIIA strongly objected to calls for a study designed to "make recommendations to ensure against incentives for small and midsize employers to self-insure."

The risk retention industry also is voicing concern about a provision in a version of the legislation passed Wednesday by the Senate Health, Education, Labor and Pension Committee.

That provision, Sec. 551 of the HELP bill, would allow the Department of Labor to issue regulations giving nondomiciliary states jurisdiction over risk retention groups that provide stop loss or excess coverage for Multi-Employer Welfare Arrangements, or MEWAs.

Mr. Roberti said this provision would undermine the basic premise of the 1986 Federal Liability Risk Retention Act (LRRA) by giving nondomiciliary states greater authority to regulate these groups by allowing each state's laws to apply–at least over MEWAs.

Present plans are for the HELP Committee bill to be reconciled with a version of the bill currently being drafted by the Senate Finance Committee. Three House committees are drafting the bill in preparation for House floor action before the chamber leaves for its summer recess July 31.

The House Education and Labor Committee, which has jurisdiction over the risk retention provision, passed the bill Friday. The House Ways and Means Committee, which has jurisdiction over the financing issue, passed its part Thursday night. Now, only the Energy and Commerce Committees have the bill before it is ready for House floor action.

And the Senate Finance Committee must complete action on its version of the bill, then mesh it with the HELP Committee version, before that bill hits the Senate floor. After that, each chamber of Congress would vote on its version of the bill before the August recess, setting the stage for negotiations on final legislations in September and October.

On the provision in the House bill, Michael Ferguson, SIIA's chief operating officer, contended in a letter to the leadership of the House Education and Labor Committee that "it is clear that the intent of this provision is to find fault with self-insured health plans and limit self-insurance to a significantly small amount of plans."

Instead of moving to restrict growth of these facilities, "self-insurance should be used as a model for reform, not a sector of our delivery system targeted for limitation," Mr. Ferguson said.

"Self-insured plans provide benefits specific to the needs and wants of their beneficiaries, are significantly more cost-efficient, and have been leaders in areas of innovation," he says in the letter.

"We respectfully ask in the strongest possible terms that you consider removing the proposed study on self-insured health plans as it would unfairly target a significant portion of our health care system that currently is working," he said.

Regarding the HELP bill provision, Mr. Roberti said the Sec. 551 provision would indeed invalidate the domiciliary state preemption provision of the LRRA, the industry's "Holy Grail," because it is counter to the "spirit of the law."

He said SIIA supports the intent of the provision, and believes "it may be an oversight to structure it this way."

Mr. Roberti said the LRRA promotes uniform, single-state regulation of risk retention groups by the domiciliary state, with only limited regulatory oversight by the nondomiciliary states where the risk retention groups operate.

"One of the main areas where nondomiciliary states can more directly regulate risk retention groups is instances of fraud and abuse," Mr. Roberti said, adding that "it appears this part of the section doesn't serve a real regulatory purpose except for setting a dangerous precedent that may dissuade small businesses from managing their own risk."

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